Population-Ecology/Organizational Ecology

Report by: John Marc B. EstoqueBernadette Garce

I. Major Proponent of the Theory

Dr. Michael T. Hannan

Michael Hannan is the Stratacom Professor of Management in the Graduate School of Business and Professor of Sociology in the School of Humanities and Sciences. 

He received his PhD in sociology from the University of North Carolina, Chapel Hill in 1970. He came to Stanford as Assistant Professor of Sociology in 1969, moved to Cornell in 1984 where he was the Scarborough Professor of Social Sciences, and returned to Stanford in 1991.

His major research interests include categories in markets, organizational ecology, sociological methodology, and formal sociological theory. His current theoretical research applies dynamic logics to organization theory. His current empirical research investigates the emergence of organizational categories and the implications of category membership for organizational identity in several domains, including winemaking in the Italian regions of Piedmont and Tuscany as well as Alsace in France.

Source: http://www.gsb.stanford.edu/users/hannan

II. Definition of Theory

What is Population-Ecology Organizational Theory?

III. Key Principles of the Theory

Population-Ecology/ Organizational Ecology TheoryA. Inertia and ChangeB. Niche Theory and Resource

PartitioningC. Density DependenceD. Age Dependence

A. Inertia and Change

Thomas Malthus (1700’s)

Charles Darwin (1800’s)

“Unchecked population increases exponentially; Whereas the food supply grows only arithmetically.

Thus inevitable limitations of vital resources would have demographic implications leading to a STRUGGLE FOR EXISTENCE”

“As population outgrew resources, STRUGGLE FOR EXISTENCE plays a role where favourable variations would lead to be preserved and unfavourable ones to be destroyed.

Thus the result would be the formation of new species to survive”

A. Inertia and Change

Natural Selection

Adaptation Speciation

A. Inertia and Change Michael Hannan (1900’s) “The Population-

Ecology of Organization”

Organization

Organism

Environment

Affects Affects

A. Inertia and Change Similar to Darwin’s Theory

Symbiotic Relationship: Both Organization and Environment changes as they influence each other

In this sense, the organization is viewed analogue to an organism. It has collective means of adapting to environmental situations.

Environment

Structure/Organizati

on

(+) Adaptive Behaviours

(+) Learning

A. Inertia and Change Inertia

The property of any object remain at rest or in uniform motion unless acted upon by some external pressures

Whereas:Object = OrganizationMotion = Movement of the Organization

(Growth, Development and Decline)External Force = Environment

A. Inertia and Change

EnvironmentalPressure

Organization’sAdaptive Flexibility

EnvironmentalSelection

COMPETITIONExtern

alPressu

re

Internal

Pressure

“arise”

Internal andExternal

Environment

ConstraintsTo

Adaptation

A. Inertia and Change

Internal Pressures External Pressures

Organization’s investment in plant, equipment, technology and specialize personnel

Internal Information that Decision Makers receive

Internal Political System

Organizational Culture

Legal and Fiscal Barriers

Availability of External Information

Competition with Other Organization

A. Inertia and Change Internal and External Pressures gives way to every

organization to generate their own “Blue Print” as a way to respond to a certain environment, the same strategy that an organism applies in order to survive. (Ex…)

A Blue Print has two functions: an information function that describes the rules used in obtaining, processing, and transmitting information about the states of external environments, and an activity function that states the rules used in acting on received information so as to produce an organizational response.

An Organization Form, therefore, is a blueprint for organizational action, for transforming inputs into outputs.

A. Inertia and Change The Blueprint can usually be inferred

through the following components:• The Formal Structure of the Organization

which includes tables of organization, written rules of operation, etc.

• The Patterns of Activity within the Organization

• The Normative Order – the ways of organizing that are defined as right and proper by both members and relevant sectors of the environment.

A. Inertia and ChangeEnvironmental Pressures(External and Internal)

Adaptation and Change Disadaptation

Approach

Blueprint

Survival Extinction

Birth of New Organization

Modification of Existing

Organization

Death of Organization

A. Inertia and Change Environmental Selection Competition

A focus on selection invites an emphasis on competition. Organizational forms presumably fail to flourish in certain environmental circumstances because other forms successfully competes with them for essential resources.

As long as the resources which sustain organizations are finite and populations have unlimited capacity to expand, competition ensues.

Four Stages of Competition1. Demand for Resources exceeds Supply2. Emergence of Competitors3. Environmental Selection eliminates the Weakest Competitors4. The Weakest Competitors either disbands or yields to a

Stronger Competitors. The Strongest Competitors grew larger

B. Niche Theory and Resource Partitioning Niche

a habitat supplying the factors necessary for the existence of an organism

Niche of an Organization Is defined as an in a constrained space (the space

whose dimensions are levels of resources, etc.) in which the population outcompetes all other local populations. The niche, then, consists of all those combinations of resource levels at which the population can survive and reproduce, itself.

B. Niche Theory and Resource Partitioning Each population occupies a distinct niche:

Changing Niche

Stable Niche

Changing and Unpredictable

Demands

Stable Demands

GeneralistOrganizati

on

SpecialistOrganizatio

n

“Continuous Production”

“Manufactures Limited Products based-on Job Order Basis

B. Niche Theory and Resource Partitioning Generalism may be observed in a population of

organization either in its reliance upon a wide variety of resources simultaneously or in its maintenance of excess capacity allows such organizations to change in order to take advantage of resources which become more readily available.

However under stable environmental circumstances, generalists will be outcompeted by specialists.

Specialists differ from generalists in how they distribute the fixed quantity of fitness over environmental outcomes.

In other words, Specialists outcompete Generalists over the range of outcomes to which they have specialized (because of fixed level of fitness assumption).

B. Niche Theory and Resource Partitioning The distinction between specialism and generalism refers to

whether population of organizations flourishes because it maximizes its exploitation of environment change or because it accepts a lower level of exploitation in return for greater security.

If in the fact the environment were unchanging, all participants were procedurally skilled, and the procedures were perfectly tuned, there would be no need for any control structure for all, except to monitor behaviour.

However when certainty is low, organizational operations are less routine. Under these circumstances, a greater allocation of resources to develop and maintain procedural systems is counterproductive and optimal organizational forms will allocate resources to less formalized systems capable of more innovative responses.

Ex…

Next Principle…

C. Density DependenceD. Age Dependence